Pricing capabilities: the design, development, and validation of a scale

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01 January 2014

Written by Stephan Liozu, Andreas Hinterhuber

Management Decision

What are pricing capabilities? Can we measure them quantitatively? Based on a survey of 1812 CEOs, pricing managers and sales executives we develop a construct that allows to measure pricing capabilities. This construct, PRICECAP, covers all the three critical dimensions of pricing: customers, competition and the company itself. Pricing capabilities are directly linked to relative firm performance.